The Share Standard is one share for every $6.25 of qualifying expenditure (previously one co-operative control share, with a nominal value of $1, for each $25 of qualifying expenditure), subject to the expenditure bands described below.
The Share Standard is based on a three year average annual qualifying expenditure rather than just the previous year’s expenditure, and Shareholders will not be required to sell shares held in excess of the Share Standard.
We have also introduced expenditure bands to avoid the need for shareholders to have to purchase a small number of shares each year to reach the new Share Standard in circumstances where there is a small change in the customer’s qualifying expenditure. The bands make it easier for the shareholders to predict their required LIC shareholding each year.
The minimum purchases amount in any one year is $1,000. Existing shareholders with qualifying expenditure between $500 and $999 will be exempt from this requirement while they are below the new threshold, provided they continue to meet the existing $500 minimum spend. Once their qualifying expenditure exceeds $1,000, they will be bound by the new $1,000 minimum purchases amount.
Qualifying expenditure will be measured in uniform $5,000 bands (with the exception of the lowest band which is between $1,000 and $4,999.99), meaning shareholders will not need to adjust their shareholding until they pass through the upper end of the relevant band.